Heavy Duty Trucking, July 2015
TM Truckings Most Respected Business Report Cool blue Kiegan Nelson of Richfield Wis captured Best of Show honors with his 1985 Peterbilt 359 and 2014 Mac trailer at the 33rd annual Shell Rotella SuperRigs competition last month at Retama Park in Selma Texas He also captured first place in the Peoples Choice category chosen by competitors and attendees Quotable If I let my fleet degrade to the conditions our roads are the state police would have put me out of business a long time ago Jim Burg owner Michigan based James Burg Trucking on infrastructure funding Are Class 8 inventories too high I nventories of Class 8 trucks haves spiked this year increasing for five consecutive months They now stand at almost 65000 units up a whopping 32 versus a year ago Normally this would be a cause for great concern However this is far from a normal year in the truck market There were record truck orders in the fourth quarter of 2014 and orders have totaled 368000 units the last 12 months This set the stage for a torrid truck market this year and OEMs have steadily cranked up production to meet this demand The orders however have been distributed for delivery throughout this year due to limited available build slots Even though there is much product in the pipeline fleets are putting new trucks into service at a modest pace This market lacks some of the urgency that was expected after the huge order numbers so inventories have started to swell Are inventories getting too high The inventoryto sales ratio orange line on chart is used to gauge whether the inventory is in correct proportion to the level of retail sales When the ratio is high there is too much inventory which indicates there is pressure on the OEMs to reduce builds When the ratio is low it usually means additional production is needed to build stocks back up The inventory to sales ratio is currently at 25 It has averaged 23 over the last three years The ratio does bear watching when it exceeds 25 Therefore inventories are high and growing but not excessive for the current sales volume It is expected that production will stay strong throughout 2015 and retail sales will continue to grow This should keep the ratio near 25 for a while Regardless the number of units in inventory is large the record inventory was 71000 units in 2006 and the ratio is near the top of the good range Therefore this ratio needs to be watched very closely For more info visit www ftrintel com hdt or contact Eric Starks at 800 988 1699 STILL STRONG Spot market freight volume remained strong in May edging down just 17 compared to April according to the DAT North American Freight Index Compared to the extraordinary volume of May 2014 however freight declined 27 Compared to long term historical trends volume exceeded same month totals for 16 of the last 18 years SPOT FREIGHT INDEX Index Year 2000 100 Information provided by DAT Solutions 18 HDT JULY 2015 www truckinginfo com
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